Experts list stocks to watch in 2023, forecast reduction in inflation

Financial experts have predicted that Nigeria’s inflation rate would decline in 2023 due to the high base effect of 2022. Inflation declined marginally for the first time in 11 months in December, hitting 21.34 per cent as against 21.47 per cent recorded in November 2022. Head of Investment Research at Parthian Securities Limited, Oluwaseun Dosunmu, […]

Financial experts have predicted that Nigeria’s inflation rate would decline in 2023 due to the high base effect of 2022.

Inflation declined marginally for the first time in 11 months in December, hitting 21.34 per cent as against 21.47 per cent recorded in November 2022.

Head of Investment Research at Parthian Securities Limited, Oluwaseun Dosunmu, who spoke at an online investment clinic, noted that the forthcoming elections would ultimately determine the next direction of the foreign exchange (FX) market.

In addition to a credible and fair election, he listed low-interest rates, new listing/capital market reforms and strong corporate earnings as some of the factors that would drive market performance in the year.

“We are optimistic that in 2023, the equities market will continue the positive momentum driven largely by the dominance of domestic investors, better corporate earnings and lower interest rates.

“Favourable FX policies and a peaceful election would likely get foreign investors trooping into the country in 2023,” he said at the January 2023 edition of the Bears & Bulls Series themed ‘An Investor’s Guide to Building Wealth on the Nigerian Exchange’.

He further explained that this is the right time to buy stocks as many investors would likely return to the market after the February presidential election, thus pumping the prices of equities.

Dosunmu cautioned that on the downside, continued monetary tightening, election violence and poor earnings of listed equities could trigger a negative outcome. He projected that 2023 will experience a continuous but slower monetary tightening and bullish oil prices, adding that some of the issues that defined economic performance last year would continue in the year but with some moderation.

According to the analyst, in 2022, Airtel and Seplat led the performance of the Nigeria equities with 71.2 per cent and 69.2 per cent returns respectively, followed by BUA Foods, BUA cement, and Geregu Power which was newly listed.

He picked Airtel and Seplat again, alongside MTN, Zenith Bank, UBA, Nestle, Dangote Cement and Lafarge as stocks to watch this year with Nigerian Breweries and Total Energies also making the list.

The Chief Operating Officer of i-invest, an investment app of the Parthian Group, Tobi Olusoga, enjoined investors to consider flexibility and diversification in the management of their investment portfolios.

She explained that i-invest would help investors to achieve this in a safe, secure and convenient way.